Attachment of Earnings

Attachment of Earnings (or court orders) describe the ability of a court to instruct an employer to deduct money from an employees wages in repayment of a debt.

When an employee receives a court order, the employer is leagally obliged to deduct the required amount from the employees pay before it is paid. This often involves complex calculations including percentages, fixed band deductions, protected earnings and minimum contribution amounts.

Luckily, PayRun.io does all the hard work for you!

Supported Attachment or Earning Types

PayRun.io supports many types of attachment (see Types of Attachment for a full list). Each type has specific attributes that contribute to how the attachment deduction is calculated.

Attribute

Description

Options

Carry Forward

Determines if arrears are carried into the next payment period

true / false

Use Fixed Deduction Band

Indicates that the deduction amount is determined using deduction band tables

See deduction bands

Fixed Protected Amount

Idicates that this type of order includes a fixed protected amount

% / £

Allow Protected Earnings

Determines if this type of court order can have an amount of protected earnings

true / false

Protected Amount

The amount of the employees payment that does not qualify for arrestment

% / £

Deduction Amount

The amount to be arrested from the employees payments

% / £

Student Loan Treatment

Describes the treatment of student loan deductions when the attachment is active

(Before / After / Stops) Student Loan

Allow Multiple

Determines if it is possible to have multiple instances of this attachment type

true / false

Arrestable Pay

Arrestable pay describes the amount of pay that can be considered for the arrestment calculation. This amount is selected from the employees pay after tax and national insurance deductions have been applied.

Example:

"Bad Debt Brian" has a court order attached to his salary. The AEOP (Attachment of Earnings Priority Order) states that £100.00 should be deduected with £50.00 of protected earnings.

Brian earns £120.00 in week one. His PAYE tax due is £18.00 and his class 1 NIC contribution is £12.00. After deductions, Brians Arrestable Pay amount is £90.00.

The order states that Brian has £50.00 of protected earnings. This results in a £40.00 arrestment being made.

Because shortfalls in AOEP repayments must be carried forward, Brian also incurs £60.00 of arrears. The arrears are considered in the next payment period and reclaimed if sufficent arrestable pay exists.

Non-Arrestable Pay

Statutory parental payments are not subject to arrestment. PayRun.io refers to these payments as "non-arrestable".

In addition to tax and national insurance, some court order types include a portion of protected earnings. This can be a fixed cash amount or percentage of the arrestable pay.

Once the arrestable pay is calculated, it is then posible to work out the deduction.

Adding an Attachment of Earnings

Like all other payments and deductions, attachment of earnings are controlled using pay instructions. The Attachment of Earnings Pay Instruction (AoeInstruction) allows you select the attachment type and include any order specific values.

Any amount owed in arrears on this order before it existed in PayRun.io

false

Claim Admin Fee

Determines if the employer is claiming the £1.00 administation fee for processing the order

true

Protected Earnings Amount

A cash value amount to be protected from arrestment

false

Deduction Amount

The cash amount to be arrested from the employee each payment period

false

Protected Earnings Percentage

The percentage value of earnings to be protected from arrestment

false

Deduction Percentage

The percentage value to be deducted from the employees earnings

false

Mutually Exclusive Properties

Some AoE instruction properties can only be set if another property is null. You can set either:

Protected Earnings Amount or Protected Earnings Percentage

Deduction Amount or Deduction Percentage

Claiming the Admin Fee

In compenstation for the administation overhead of collecting court order arrestments, the employer is allowed to claim a £1.00 administration fee from employee payments.

Setting the Claim Admin Fee property to true instructs PayRun.io to include a £1.00 deduction line in the employees payslip.

The employer can deduct an administration fee for each active court order the employee has.

Previous Payments and Previous Arrears Properties

For situations where the court order was issued prior to the payroll existing in PayRun.io, you can include previous payments and previous arrears in the AoE Pay Instruction. Theses values are then considered when the arrestment value is calculated.

Linked AoE Instructions

It is sometimes nescessary to change the deduction behvaiour of an attachment. An example of this is if the employee appeals and is allowed to reduce the deduction amount of the order.

PayRun.io supports this behaviour by linking AoE pay instructions. Any AoE instruciton that has a matching Case Number is considered linked. During the arrestment calculation process, all (in scope) linked instructions are considered.

AoE Pay Lines

When an in-scope AoE pay instruction is detected, the PayRun.io calculation service will generate a AoE Pay Line. The pay line details the amount of arrestment made and indicates any change to the arrears amount.

Arrears on the Pay Line

AoE pay lines are considered cumulatively. The total amount arrested (against the court order) and balance of arrears is calculated by aggregating all historical pay lines.

AoE pay lines store a postive or negitive arrears value to represent the changing state of the arrears balance. A positive number indicates arrears have increased; a negative number indicates arrears have decreased.

Example:

Week

Pay Line Arrears

Arrears Balance

1

£20.00

£20.00

2

£-15.00

£5.00

3

£0.00

£5.00

4

£-5.00

£0.00

Attachment of Earnings in the Commentary

Like all other PayRun.io calculations, a full explanation of the calculation can be seen within the employees calculation commentary report. The commentary exactly describes the steps taken to reach the arrestment and arrears amounts.

Types of Attachment

PayRun.io supports many different types of court order attachment. The type of attachment is determined (in the AoE Pay Instruction) by specifying the a special AoE Type Code. The codes and attachment types are detailed below.